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iden·ti·ty. noun \ī-ˈden-tə-tē, ə-, -ˈde-nə-\: the distinguishing character or personality of an individual -Merriam-webster.com

I suggested in my previous post about identity networks that Behavior Networks have certain properties.

But what about Identity networks?

Identity networks are primarily networks of connections, not content. Even though content rides on top, identity (friends, co-workers, classmates, teammates etc) is defined by connections between users are the primary organizing principle.

Behavior networks don't need to or even really care to store your data of this variety. To some degree, this is about the maturity of the network itself. Path is well-funded, and doesn't necessarily need to generate revenue - it is focusing on creating a product people love. It is also riding the tide of people who think identity networks are too powerful.

This property of identity networks is quite interesting. Who is the customer, from Facebook's perspective? Depending on your point of view, the customer is the one who pays (the advertiser) or the user (the person who registers an account for their identity). What if those two groups do not want the same thing? So identity networks are constantly seeking to grow revenue without alienating users, who produce the inventory for sale to advertisers.

The inventory is connections, and content, and the trackable data within the network, and we are now at the point where users have more control, but also less power in this equation. They have more discrete levels of control over their information, but less aggregate power: their information remains on the site. The business of Facebook marketing seeks endlessly to grab data from users, turn it into inventory and find willing bidders for that inventory.

LinkedIn is Facebook's strongest rival identity network. LinkedIn has added many more content behaviors than I really thought possible, but it has proven its staying power and has a commanding advantage in terns of data that is increasingly an opportunity for display advertising and the emerging corporate pages that employees are now connecting to. What remains under-leveraged is the extension of LinkedIn's identity network into the physical and corporate IT environments. I'll do a separate post about some strategic opportunities along those lines for LinkedIn.

The value of a network increases exponentially with the number of people (nodes) and the number of connections between them, but as users become aware of the power dynamic in which they stand, value is being drained out of the network. This is first reputational damage done by privacy scandals and the like, and subsequently by users who defect to behavior networks or leave the social world altogether. this is why Facebook runs aggressive re-engagement campaigns for users who have not logged in regularly.

Path is somewhere between a behavior and identity network, and seems chastened by the address book privacy scandal from just a few months ago. In fact, if you go back to the launch of Path's app "With" which had a very simple photo sharing mechanic for sharing who you are With, Path lets us know they are in the business of building networks:

as we continue our quest to build new types of networks which maintain their quality over time, we have been fascinated by the idea of an interaction network. Or, as we enjoy calling it, the With Graph.

Interaction networks, or behavior networks, can be discrete products, to test features and bring a feature set clearly into focus before adding it into a product. It's clear that this ethos is infused within Path, as many have discovered. Check out Path's About web page - which I have labeled below; the lesson: don't build when you can get all of the functionality without woorying about the infrastructure?

These are just some of the issues that companies struggle with. Do we build our own networks, or extend others? Do we have the ability to trust business partners to host our content, and critical utilities, when they are focused, precise, but not under our control? One of the side effects of a services-oriented world, in which marketing services are delivered by a multitude of vendors and in-house solutions, is that identity and behavior networks can be easily adopted into the marketing ecosystem - will it be you, or your competitor who gets there first?

Foursquare has a better shot at being a location-enabling platform, and it is doing a great job of expanding the behaviors - from check-in to discovery - that can be built with the network. It could become a centralized clearinghouse of your place in physical space, enabled with your permissions and enriching digital interactions. Foursquare's connections are transmit location information, which has different sensitivities, and it's been harder for other social networks to effectively create location-sensitive content filters. The rich opportunity for serving deals and enriching merchant relationships arising from actual, physical visits and commerce. Perhaps Foursquare could a platform for retail commerce, featuring payments and offering retailer CRM opportunities..but it will have to become a stronger Identity network in order to do so.

I will address ways to profit from this tension between behavior networks and identity networks, and how to effectively leverage behavior networks, in a future post.

Instagram's acquisition by Facebook illustrates how the tension between identity networks, and behavior networks will play out in the marketplace, and how it may not benefit users directly. This divide pits sites like Pinterest and Instagram vs. Facebook, Twitter, Path, and others.

Identity networks, like Facebook and Linkedin, focus on You and managing connections to pieces of identity, and while you may have have wide-ranging conversations within such networks around content, which are key to communicating your identity, the profile remains the anchor point to an identity you care about. Facebook deserves credit for making this idea popular and easy to understand - forcing Google and Microsoft to change in many ways.

Facebook's Connect and Open Graph initiatives show how crucial the concept of identity is to the Facebook model- the advertising Facebook sees in the future isn't customized by cookie pools, it's customized based on the open graph. It's not limited to Less and less of the meaning that users derive from being Facebook users will come from using Facebook.com and more and more will come from experiences enabled by the Facebook Platform. Facebook, as it extends the platform, is admitting that it cannot innovate fast enough at the edge to keep every user fully engaged - what they want is to have that user identified and authenticated, pulling their behavior into the Facebook ecosystem.

Thus, the edge of the platform, powered by identity, is where new user behaviors will emerge. These emergent groups of connections, I call Behavior Networks. They have several important properties.

Leverage an identity network to authenticate users - e.g. social sign in

An intentionally narrow feature set, the novelty of which self-selects new users.

User to user value exchange is based on behaviors - e.g. who you are on Pinterest is DEFINED by what you pin.

Nonlinear growth in user base enabled by the Identity Network.

Scale is the enemy of behavior networks, because they represent the end of novelty (2).

Behavior networks remain rooted in one style of behaving, and are key to a very specific context or action. Instagram and Pinterest are in this category. While relying to varying degrees on your identity (on Facebook, Twitter, etc) your identity on these sites defines your behavior - if you never publish anything, you don't exist. No matter how many instgram photos you take, that's all the network says about you.

Test yourself, when was the last time you deleted an Instagram photo? When was the last time you deleted a Facebook post? I've done many of those things on Facebook, but I never worry about Instgram.

The real-time web is perfect for behavior networks. All that matters is what you are doing- your behavior is your only identity but it doesn't live forever.

For these reasons, these behavior networks represent a challenge for marketers. Extending engagement beyond the behavior network - site traffic, conversions and so on - will be used to prove that the marketer's participation had some value. And this will require functionality a behavior network operator will be loathe to construct. All ROI metrics will come down to this: did the users engage further? Did they pin stuff and their friends bought it? The ROI analysis will require a channel linked to identity. So as marketers we face the dilemma of proving the value of engagement beyond behavior networks, and these are uncertain times indeed.

My next two posts on this topic will deal with:

Path, Twitter, LinkedIn and Foursquare: Can there be more than one identity network

If you posted 100 tweets about the industry/your firm and then saved one sale with 10 @replies, that's only 10% reply percentage, whcih Zarella's charts imply is low. Is it? If it moves your business, you can't argue it's not working.

Agreed, in my example we don't have any data about operational costs or incremental revenue, but every business is different, even if you're selling unicorns. Concentrate opn what your customers want, and track whether you're delivering it.

No, no, it's ok, I have everything I want. You don't need to get me anything. Really? What's this? Socks? (Actually, I just bought new athletic socks for running, no joke from Amazon (Affiliate Link).

But what I'm really exited about, gift wise, is this page used by Staples email marketing to promote thier Twitter comtest. Let's face it, brands usually need to give prospective followers something exciting to do - classic what's in it for me.